Stemming the slide to crisis over the onshore/offshore Bill

December 12, 2002
2 mins read

It is becoming increasingly likely that a new crisis will burst forth soon between the executive and the legislature, this time over the onshore/offshore Bill that President Obasanjo presented to the National Assembly to douse the agitation by the littoral states.

The agitation reached a crescendo in the wake of the Supreme Court  judgement  which was interpreted within the context of Nigeria’s high wire politics as being against the interests of the oil producing states, especially such states as Akwa Ibom that had depended almost entirely on revenues accruing from offshore fields to earn the revenue by derivation.

As it was, President Obasanjo took a decisive step to ensure a solution to the crisis when he presented the Bill which said that for the purpose of derivation, the littoral states will be entitled to revenue sourced within 24 nautical miles (the so-called contiguous zone) of Nigerian territorial waters.

Contrary to the Bill presented to parliament by the president, the National Assembly awarded the derivation revenue within 200 nautical miles (i.e. within the country’s Exclusive Economic Zone). President Obasanjo vetoed the Bill; and it looks likely that the National Assembly is preparing to use a 2/3 majority to adopt the Bill as amended by the National Assembly.

The issues here ought to be clear enough, at least to the parties involved in this dispute. The original Bill presented by President Obasanjo was a very realistic premise which Located the area of derivation within 24 nautical miles. Most of our national offshore oil production currently takes place within the 24 nautical miles.

For the National Assembly to push further into the Exclusive Economic Zone (EEZ) is to prepare ground for all kinds of problems and serious conflicts in the future. It is noteworthy that our EEZ coincides -with that of the tiny Republic of Sao Tome and Principe, and it was to avoid a conflict that Nigeria has entered an agreement with the country to open up a Joint Development Zone, a process that has considerably reduced potential rift between the two countries.


It is also important to point out that the Exclusive Economic Zone can only be treated as the patrimony of the entire country and not a zone belonging to littoral states, since it is only sovereign Nigeria that can enter into agreements in respect of the use of the resources of the zone. Such revenues accruing therefrom should therefore benefit the entire Nigerian nation.

It is the realisation of the danger involved in the National Assembly’s amendment to President Obasanjo’s original Bill that informed the recent outcry of the Kano Elders Forum which says that if passed into law as it stand, the Bill will “have devastating consequences on the economies of the non-oil producing states”. The forum further noted that the implication of the amendment effected by the National Assembly is to extend the boundaries of some of Nigeria’s littoral states.

We share the sentiments coming from the Kano Elders Forum and call on the National Assembly to re-examine its amendments to the original Bill presented to it by President Obasanjo. In this particular case, the executive is on the right side of Nigeria’s national collective interest which takes into cognisance the well being of the oil producing and non-oil producing states alike.

It is therefore important to stem the potential slide to crisis over an issue that represents the main revenue earner for Nigeria. We recognise the imperatives to satisfy the de rivative principle in revenue allocation as provided for by the country’s constitution and also note the emotions that the onshore/offshore controversy has generated in different communities located in the oil producing region of Nigeria, However legislation must be carried out with reason and the realism that protects the national patrimony. Extending the boundaries of the littoral states for the purpose of revenue into the nation’s Exclusive Economic Zone is honestly irresponsible because it overturns the entire basis of national economic cohesion.

We urge the legislature to rethink the amendment and retrace its steps back to the original provisions of the Bill presented by President Obasanjo.

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